CASELET FOR MODULE 1:

Strategic HR at Colgate-Palmolive

Colgate-Palmolive Company (C-P) is a global company with sales of over $5 billion that recently
received new ‘marching orders’. The new CEO developed and communicated a new strategic
direction for the company based on what he called his ‘corporate initiatives’. Among other
things, the new strategy emphasized concentrating on new products, being the low-cost
producer, and simplifying businesses and people management procedures. It also focused on
changing structures, pushing decision-making downward, promoting entrepreneurial action, and
improving morale and motivation. The new strategy was aimed at making Colgate a leaner,
more responsive competitor in its global markets and in focusing the company more clearly on
health-related products.

Consistent with this new strategy, several steps were taken. Four major businesses were
divested, including two sports and recreation companies. A major reorganization took place,
which merged two levels of senior management. HR programmes at C-P got a new mandate to
help Colgate achieve its new goals.

The programmes laid out for Colgate provide a glimpse of how HRM today is being pressed to
get involved in strategic management. At C-P, HRM was directed by the CEO to develop and
execute programmes designed to create a company culture that would achieve the following:

• Encourage a spirit of teamwork and cooperation among business units in working towards
common objectives, with emphasis on acknowledging and rewarding individual and unit
excellence.

• Foster entrepreneurial attitudes among the managers and innovative thinking among all
employees.

• Emphasize the commonality of interest between the employees and shareholders.

To that end, numerous HRM programmes had to be designed. For example, the company’s
executive incentive compensation plan was redesigned to place more emphasis on individual
performance and achieving operating targets. Employee benefits were redesigned to make
them more flexible and responsive to employees’ needs. The bottom line was that by
implementing these programmes, HRM helped refocus employee efforts in a manner that
contributed to the extension of Colgate’s strategic plan.
Soon, C-P topped the list of the 25 best big companies for work–life balance. C-P offers some
great employee benefits, such as flexible work hours, telecommute options, and nearby back-up
childcare centres, which is a nice perk for work-at-home parents. As a result, C-P has a high
rate of employee retention, which is a testament to their work culture. Colgate truly is a world of
opportunity. To support employee development and job satisfaction, Colgate proudly offers
global career opportunities and access to world-class training and education programmes.
Colgate encourages employees to expand their professional horizons. Attracting, developing,
and retaining exceptional people is a priority for the company. C-P has a two-pronged approach
to developing people.

• Individual development planning (IDP): Colgate IDPs enable employees to partner with their
managers to identify skills, behaviors, and knowledge needed to achieve specific goals

• Succession planning: Colgate relies on global succession planning to identify and develop a
continuous stream of the next two to three generations of Colgate leaders

One major problem that C-P is facing in the current scenario is how to sustain organizational
excellence in a perpetually disruptive job market. With large scale turnover taking place across
all industries and retiring baby boomers in the western world, getting a good supply of people is
a challenge and C-P is learning to grapple with that challenge currently.

C-P managers realize the need for an even more coherent HR-strategy integration. Colgate is a
truly global company being globally diversified in over 120 countries in all continents. As such, it
is important to attract, develop, and retain people of all backgrounds, cultures, and nationalities.
Building this global mindset and cultural sensitivity in the people is critical to their business
survival and to the family’s satisfaction while operating abroad. This requires having superior
communications up, down, and across the organization, and to have values in place that
encourage cooperation, sharing of information, and joint decision-making.

There is a need to integrate people, processes, and functions along a common theme. It must
begin by developing the competencies, getting senior management commitment,
communicating the intent and encouraging everyone, from the administrative staff to the most
senior staff to come together. This certainly requires establishing processes which bring forth
and tap the ability of all employees to contribute effectively. Effective change management must
be in place to manage the transition from where the organization is now to where it needs to be.
All this brings forth the extremely crucial role of the HR team. Getting the team geared up is the
key.
Questions for Discussion

1. Which approach or model of SHRM is evident from the case? Discuss.

Harvard Model (Humanistic Approach) Is evident from the case. As you can see from the
Colgate-Palmolive Case, it is based on an organization's current managerial and strategic
dilemma which must be handled sensitively in order to allow advancement and maintain its
competitive position in the marketplace. In particular, this concern directly affects the company's
management and strategic planning.

2. What does the company need to do to gear up its HR team in order to cope with the
challenges discussed in the end?

Colgate-Palmolive must continuously assess and evaluate the external environment to